Correlation Between Visa and Jhancock Global
Can any of the company-specific risk be diversified away by investing in both Visa and Jhancock Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Jhancock Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Jhancock Global Equity, you can compare the effects of market volatilities on Visa and Jhancock Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Jhancock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Jhancock Global.
Diversification Opportunities for Visa and Jhancock Global
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and Jhancock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Visa i.e., Visa and Jhancock Global go up and down completely randomly.
Pair Corralation between Visa and Jhancock Global
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.82 times more return on investment than Jhancock Global. However, Visa is 1.82 times more volatile than Jhancock Global Equity. It trades about 0.11 of its potential returns per unit of risk. Jhancock Global Equity is currently generating about 0.06 per unit of risk. If you would invest 26,932 in Visa Class A on September 1, 2024 and sell it today you would earn a total of 4,576 from holding Visa Class A or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Visa Class A vs. Jhancock Global Equity
Performance |
| Timeline |
| Visa Class A |
| Jhancock Global Equity |
Visa and Jhancock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Jhancock Global
The main advantage of trading using opposite Visa and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Jhancock Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jhancock Global will offset losses from the drop in Jhancock Global's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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